[Federal Register Volume 59, Number 30 (Monday, February 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3355]


[[Page Unknown]]

[Federal Register: February 14, 1994]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MM Docket No. 92-266; FCC No. 94-33]

 

Cable Television Act of 1992

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has adopted an Order extending the freeze of 
regulated cable service revenues from February 15, 1994 until May 15, 
1994. This Order will provide affected parties a sufficient amount of 
time to familiarize themselves with any modifications to the 
Commission's cable rate regulations before the freeze is lifted.

EFFECTIVE DATE: This document is effective February 14, 1994, and 
extends the effectiveness of Sec. 76.1090 until May 15, 1994.

FOR FURTHER INFORMATION CONTACT:
Lawrence A. Walke, (202) 416-0847.

SUPPLEMENTARY INFORMATION: The text of this document is available for 
inspection and copying during normal business hours in the FCC 
Reference Center (room 239) 1919 M Street, NW., Washington, DC 20554, 
and may be purchased from the Commission's copy contractor, 
International Transcription Service, (202) 857-3800, 2100 M Street, 
NW., Washington, DC 20037.

Order

    In the matter of implementation of sections of the Cable 
Television Consumer Protection and Competition Act of 1992--Rate 
Regulation.
    Adopted: February 8, 1994.
    Released: February 8, 1994.

    By the Commission: Commissioner Barrett issuing a separate 
statement.

I. Introduction

    1. In this Order, on our own motion, we reconsider the expiration 
date of the freeze of regulated cable service revenues, and extend the 
expiration date of the freeze from February 15, 1994 until May 15, 
1994. Later this month, the Commission will consider pending petitions 
to reconsider various aspects of its rate regulations. In considering 
the petitions for reconsideration and other issues outstanding in the 
rate regulation proceedings, the Commission will address, among other 
issues, the benchmark/price cap methodology, relief for small systems 
and so-called ``going forward issues.'' The Commission also plans to 
adopt cost of service rules. This short extension of the freeze is the 
minimum amount of time required to enable affected parties to 
familiarize themselves with any modifications to the cable rate 
regulations before the freeze is lifted.

II. Background

    2. In the Rate Order issued in May 1993, we established a 
comprehensive regulatory framework providing for rate regulation of the 
basic service tier by local franchising authorities and of cable 
programming services tiers by the Commission as required under the 
Cable Act of 1992. We established June 21, 1993 as the effective date 
of our new rate regulations. At the same time, we were concerned that 
during the period between adoption of our rules and the earliest 
practical opportunity for local franchising authorities to establish 
regulation of the basic service tier, and for consumers to file 
complaints with the Commission concerning rates for cable programming 
services tiers, cable operators could raise rates, effectively 
undermining the statutory mandate that rates for cable services remain 
reasonable. In particular, we were concerned that cable operators could 
raise rates to potentially unreasonable levels, as determined under the 
rate regulations ultimately adopted. We determined that a freeze of 
regulated cable service revenues until August 3, 1993 would provide a 
reasonable opportunity for local franchise authorities to become 
certified to regulate the basic service tier and for consumers to 
invoke by complaint the Commission's regulatory oversight over cable 
programming services tiers. Accordingly, we established a freeze until 
that date of revenues for cable services subject to regulation under 
the Cable Act of 1992. Under the freeze, the average monthly subscriber 
bill for cable services and associated equipment subject to rate 
regulation under the Cable Act of 1992 may not increase above the level 
determined under rates in effect on April 5, 1993. The Commission 
provided for waivers of the rate freeze in particular cases where a 
cable operator can demonstrate that the freeze would impose severe 
economic hardship or threaten the viability of continued cable service.
    3. Subsequently, the Commission reexamined the feasibility of 
implementing rate regulation by June 21, 1993 in view of the 
significant additional responsibilities imposed on the Commission by 
the Cable Act of 1992 and a severe funding shortfall faced by the 
Commission at that time. We extended the freeze until November 15, 
1993. Our regulations establishing rate regulation of cable service 
became effective September 1, 1993. However, those regulations were 
subject to reconsideration. Because the rate regulations were pending 
reconsideration, by early November, 1993, the Commission had received 
applications for certification from local franchising authorities 
representing less than 20 percent of communities that may regulate the 
basic service tier. Accordingly, on November 10, 1993, the Commission 
further extended the freeze on regulated revenues until February 15, 
1994. We stated that, where local governments already have initiated 
rate regulation of the basic tier, we were not concerned that rates for 
the tier could raise to unreasonable levels after November 15, 1993. We 
noted that in the initial freeze order, we determined that a freeze on 
rates for the cable programming services tier was necessary to prevent 
operators from evading the freeze by moving programming from the basic 
to the cable programming service tier. We concluded in the Nov. 10 
Extension Order that it was unnecessary to continue the freeze for 
cable programming service tiers where the basic tier has become subject 
to rate regulation. Accordingly, we amended the rule to make clear that 
the freeze would no longer apply to regulated cable services provided 
by cable operators whose basic cable service has become subject to rate 
regulation by a local franchising authority or the Commission. As a 
result, the number of cable systems subject to the freeze decreases as 
franchising authorities become certified.

III. Discussion

    4. As of January 31, 1994, the Commission had received 4,896 
applications for certification from local franchising authorities 
covering approximately 7,534 communities served by cable. Although 
these figures for certifications are significant increases from the 
last time we extended the freeze, they still represent only a small 
percentage of the nearly 30,000 communities that are potentially 
eligible to regulate the basic service tier. We continue to believe 
that it is important to provide franchising authorities and other 
affected parties sufficient time to become familiar with any 
modifications to our rate regulations before the freeze is lifted. We 
expect to act on reconsideration by the end of this month, and we 
believe that it is important that the statutory goal of ensuring 
reasonable rates not be undermined in the interim.
    5. The Administrative Procedure Act requires that new substantive 
rules be published in the Federal Register at least 30 days prior to 
their effective date. In the event that we adopt any substantive 
changes to our rules on reconsideration, we anticipate that such 
revised rules would be released approximately 30 days after adoption 
and that these regulations would be published in the Federal Register 
within 15 days thereafter. In addition, we will be adopting rules 
addressing issues raised in the Third Notice of Proposed Rulemaking, 58 
FR 46737 (Sep. 2, 1993). Thus, under this schedule, any new regulations 
adopted would become effective approximately 75 days after adoption. 
Extension of the freeze for that period of time is the minimum amount 
of time required to enable the Commission to adopt modified rules, 
should it choose to do so, and for such rules to become effective 
before the freeze is lifted.
    6. We believe that this brief extension of the freeze will ensure 
that local regulators have been afforded a sufficient opportunity to 
file for certification and prepare for rate regulation under any 
modified rules that may be adopted. This extension should provide 
sufficient time for local regulators to become familiar with their 
rights and obligations under any such new regulations before cable 
operators are free to raise rates absent regulation. We emphasize that 
we will continue to provide cable operators the opportunity to file 
petitions for relief which demonstrate, in individual cases, that the 
freeze is causing severe economic hardship or threatens the viability 
of continued provision of cable service. Throughout the duration of the 
rate freeze, we have received only five such petitions for relief. 
Thus, we conclude that only a small percentage of cable operators 
believe that the freeze has imposed hardship sufficient to compel them 
to seek relief from the freeze.
    7. We also note that the Commission has acted expeditiously in 
addressing petitions for reconsideration of its rate regulation rules. 
In adopting rate regulations for the cable television industry, the 
Commission recognized that the rules would require further refinement 
based on survey data of the cable television industry to be gathered 
and analyzed by the Commission. Shortly after the new rules became 
effective, the Commission conducted a survey to collect the data 
necessary to help it assess the rate regulations. The Commission has 
analyzed this survey data and is now in a position to resolve the 
pending petitions for reconsideration by the end of this month. In 
addition to analyzing the survey data during the period since adoption 
of the rate rules, the Commission has accommodated the requests of 
numerous cable operators, franchise authorities, programmers and many 
other interested parties, to meet with the Commission's new Chairman, 
who assumed office on November 29, 1993, for the purpose of expressing 
their views on the issues which the Commission will address on 
reconsideration of the rate rules.
    8. We find good cause under the Administrative Procedure Act to 
make this freeze effective with less than 30 days advance publication 
in the Federal Register. As explained, an extension of the freeze from 
February 15, 1994 until May 15, 1994 is necessary to afford local 
franchising authorities a sufficient period in which to familiarize 
themselves with any revised regulations governing regulated cable 
service rates that the Commission may adopt on reconsideration later 
this month. We will make this Order and implementing rule changes 
effective upon publication in the Federal Register to prevent an 
expiration of the freeze that would otherwise occur with 30 days 
advance publication in the Federal Register. Such a result would 
seriously undermine the statutory goals of cable rate regulation and 
would be contrary to the public interest.

IV. Ordering Clauses

    9. Accordingly, it is ordered, Pursuant to sections 4(i), 303(r), 
and 623 of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 303(r), and 543, that the freeze of cable service rates 
established in Order, 8 FCC Rcd 2921, 58 FR 17530 (April 5, 1993), 
clarified, 8 FCC Rcd 2917, 58 FR 21929 (April 26, 1993), extended, FCC 
93-304 (released June 15, 1993), 58 FR 33560 (June 18, 1993), extended, 
FCC 93-494 (released November 10, 1993), 58 FR 60141, is extended until 
May 15, 1994.
    10. It is further ordered, That Sec. 76.1090 of the Commission's 
rules, 47 CFR 76.1090, is amended as set forth below.
    11. It is further ordered, That this Order is effective February 
14, 1994.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

    Part 76 of chapter I of title 47 of the Code of Federal Regulations 
is amended as follows:

PART 76--CABLE TELEVISION SERVICE

    1. The authority citation for part 76 continues to read as follows:

    Authority: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as 
amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085, 1101; 47 
U.S.C. 152, 153, 154, 301, 303, 307, 308, 309, 532, 533, 535, 542, 
543, 552, as amended, 106 Stat. 1460.

    2. The effectiveness of section 76.1090 is extended until May 15, 
1994, and the section is amended by revising paragraph (a) to read as 
follows:


Sec. 76.1090  Temporary Freeze of Cable Rates.

    (a) The average monthly subscriber bill for services provided by 
cable operators subject to regulation under section 623 of the 
Communications Act shall not increase above the average monthly 
subscriber bill determined under rates in effect on April 5, 1993, 
until May 15, 1994.
* * * * *
[FR Doc. 94-3355 Filed 2-11-94; 8:45 am]
BILLING CODE 6712-01-M